/ Money

Let’s shatter the myth of ‘free’ banking

Some of the banks have suggested that the way to avoid future banking scandals is to let them charge for current accounts. It’s time to shatter the myth of ‘free’ banking.

Our latest research has found that some current account holders are paying as much as £900 in bank charges.

£900 in charges? Yes, charges for going overdrawn for two days per month without permission range from £120 to £900 a year. Yorkshire/Clydesdale Bank’s Current Account Plus will charge £75 a month on this basis, or £900 per year. The cheapest unauthorised overdraft, Halifax’s Reward Current Account, charges £5 a day (£120 a year).

Even if you have an authorised overdraft, there are still high annual percentage rates to fear when you go into the red. If you use your authorised £200 overdraft with your First Trust classic account six days a month, you’d be charged £185 a year.

All of this adds up to a hell of a lot of money. And it’s not just a few people paying these fees. Our survey of current account holders found that six in ten have paid a bank charge that they thought was unfair, hidden or disproportionate.

In fact, consumers are paying over £9bn a year in fees and lost interest. Clearly, banking isn’t free, so why are banks saying we should pay more for our accounts to avoid future crises?

Change the culture and practices of banks

Consumers shouldn’t be footing the bill when the banks have let us down so badly. In fact, we think that any agreement by the banks to start imposing a monthly fee (suggested even by the FSA) would breach Competition Law. This also alludes to collusion, which would prompt us to call for strict penalties against banks that get together to fix fees.

To suggest that banks increase charges to avoid more scandals defies logic and is nothing more than a slap in the face for consumers who are being hit hard by one of the worst financial crises in recent history. It’s even more ridiculous when you consider that consumers bailed out banks in the first place.

So let’s put a lid on the myth of ‘free’ banking. Instead there needs to be a fundamental change to the culture and practices of the banks, including greater transparency about the true cost of banking. Ultimately, the current parliamentary banking inquiry needs to put you and me, the consumer, first.


The one bank charge I would like to see is for paper-based transactions, especially cheques. As someone who conducts his banking electronically, I’m fed up with subsidising free paper-based transactions for other customers. I’m also fed up with people who owe me money giving me cheques, which is unduly onerous upon me, and those who I owe money insisting on a cheque instead of giving their sort code and account number. I would like to see the banks charge £1 for every cheque written and separately £1 for every cheque deposited. If the recipient has a sort code and account number, there is no reason that a bank transfer cannot be used instead of a cheque. Bank transfers can be instructed online, via telephone banking or in a branch.

Dave D says:
21 August 2012

There’s a great many reasons, mostly outlined on the previous Which? convo’s about this issue, but significantly including people needing to TRUST whoever they give their details to. If someone is paying you for the first time and doesn’t yet know you, how do you propose that they should know if they can trust you?

However, far more to the point is that fact that whilst On Line banking is (as far as I know) free to use, the millions of Debit Card transactions cost more than the cheques do, and all customers, including those who never ever use a debit card (regardless of whether they use cheques or not) are being fleeced for those fees.


I felt I needed to respond to the rather pompous first comment. Although cheques might be difficult from a business point of view,many older people do not have access to a computer.This can be because of income level or because they are not comfortable using a computer. There is already far to much prejudice in society against older people and they do not need to be penalised further. As mentioned by the WHICH campaign,I doubt if any bank is currently losing out financially. The main problem with banks is the risk they took with everyone’ s money which caused the crash. Why should the public rectify this? Banks have mainly escaped the effects of their behaviour which have caused misery to thousands of people.


Dave beat me to it, but the need for cheques has been discussed at great length on Which? Conversation. If you don’t like taking cheques, nfh, I suggest you give a discount for your preferred method(s) of payment.

As many have pointed out, cheques are important for charities. Yesterday, I was given a cheque for £150 for the charity I work for. I’m glad it was not cash, and in the circumstances, there were no other alternatives. I don’t pay by cheque if there is an alternative.

We could make a charge for paying by cheque (as with postal orders) but once again, charities could lose out.

I suggest you get involved with a small charity that attends events all over the place and you will soon realise the importance of cheques. It’s not just charities that need cheques to remain.


Dave D, why should anyone need to trust someone to give them their sort code and account number, which are used for receiving money? I am not, for example, suggesting that anyone gives out their debit card number or online banking login, which are used for paying money. Also, debit card transactions do not cost more than cheques. Paper-based transactions are inherently more costly for the banks than electronic transactions, and this is reflected in their charges to businesses.

Paganlady, as I have already pointed out, online banking is not the only way to instruct a bank transfer, so I don’t understand why you are focussing on this particular method alone.

Wavechange, I don’t understand your comment “If you don’t like taking cheques, I suggest you give a discount for your preferred method(s) of payment“. If as a consumer I buy faulty goods online and return them for a refund, why should I give a discount to the trader for refunding me other than by cheque? If the refund is for a small amount like £10, it is disproportionately onerous for me to make a special trip to the bank or post office to deposit the cheque. Very often business who owe me money send me a cheque against my wishes, which wastes my time; I would like to see bank charges that discourage this annoying practice. Also charities have sort codes and account numbers, so they can receive bank transfers in the same way they can receive cheques.

Cheques are redundant and nobody has given a convincing reason why they should continue to be provided free of charge. This is proven by the fact that other countries manage fine without them, using bank transfers instead.

Dave D says:
21 August 2012


If you need anyone to explain to you why it is necessary for one to trust anyone to whom one gives one’s account number and sort code then:

a) you are not heeding the security advice of all British Banks
b) you are at great risk of being the subject of identity theft or fraud yourself and
c) you are not really in a position to advise others on secure methods of payment.

I respectfully suggest that you look into a) and b) above for yourself before you loose everything!



The charity I belong to does use electronic transfer and it was me who pushed for this to happen.

Unfortunately that does not work well if the transaction takes place in a gazebo at a village fete, in a church hall or on a boat. Please try to see that your solution does not suit everyone. Carrying around a lot of cash is asking for trouble.


Well said Wavechange – the last thing we want is more charities signing us up for direct debits on the high street [or our doorsteps even] Sorry! Off topic . . . different Conversation.



To clarify my comment, I suggest that you consider charging less for goods or services if a customer uses your preferred method of payment.


Wavechange, I’m not the business but the consumer. As I said above, if I buy faulty goods online and return them for a refund, why should I give a discount to the trader for refunding me by a means other than by cheque? If the refund is for a small amount like £10, it is disproportionately onerous for me to make a special trip to the bank or post office to deposit the cheque. I’ve think you’ve totally missed the point.


Yes, making a special trip to the bank or post office to deposit £10 wouldn’t make much sense. I would try to combine the journey with something else like a bit of shopping or going to the library or the pub perhaps.


Thanks John. I do agree that we need to watch out for some of the things that some charities get up to.

Can I suggest that discussion of cheques is continued on the relevant Conversation?


Your bank code and account number are of no use to anyone at all other than to pay money into your account. They are on every cheque, if you write them.


Here here. And why not charge cusotmers for using a branch. In the internet age branches arenot needed.
The Which report fails to tackle the differences betewwn customer. I never use cheques and never go to a branch (althiought I use ATM machines).
I have no objection to people writing cheques or using branches, so long as they pay a price that covers thencost san dprovideds a profit margin for the bank.
The Which report does not tackle these issues. So it will beconsigned to the dustbib, where it belong



You want people charged for using branches or cheques. Fine, but you should be charged for using ATMs. I understand it is quite expensive to maintain this service.


It is a matter of supply and demand. The banks should charge for any service where they can get the customer to pay. It is fine to say charge for ATM but the judgement is, rigthly or wrongly that customers would not put their money in the bank if they had to pay to get it out.
The same logic applies to cheques but cheques are Stone Age technology. We no longer use quill pens either.
So I want banks to charge for cheques to encourage customs to use electronic banking.
Business which accounts for most of profits and activities does not by and large user cheques.
It is the retail customer who uses cheques, by and large he is a loss making customer (I know I worked in a bank finance department) So I would be very happy if the banks informed many customers that they are not wanted.
Not so terrible It is the situation in many countries


Hello all, we have lots of Convos about cheques, and many of your comments would be best suited there: https://conversation.which.co.uk/money/cheques-saved-by-payments-council/ Thanks.


The argument that banks are suggesting charges on current accounts would somehow avoid scandals in investment banking and sales of add-on insurance etc is garbage and I don’t think Which? should encourage it with this nonsense about transparency. Banking’s an inherently non-transparent activity, and paper transactions in some cases give people an audit trail which the relentless spread of electronic transactions, as mentioned by the only comment so far, reduces people’s control over their own finances. Letting banks charge in a myriad of “market-decided” ways for their “services” is just a recipe for more money to leave account-holders’ pockets to go in bonuses, high bankers’ wages, payments to overseas shareholders, etc.

Instead, why not manage the risks of global banking by splitting investment banking from day-to-day personal banking, reductions in market share by breaking up the larger players and applying US-style “anti-trust” principles, and allow and even encourage well-regulated mutual banks to provide services which individual customers actually want, including paper-based transactions and an avoidance of petty niggling charges for each activity – ie routinely free banking unless there are significant changes in the operation of the account such as use of planned and unplanned overdrafts, foreign currency operations, etc.

Dave D says:
21 August 2012

I am just old enough to remember when banking wasn’t “Free” before.

I started work in 1986 (aged 18) and at that time I had a TSB savings account. I had the account converted to a Current account & my salary was paid into it. I cannot honestly recall whether my account attracted charges whilst in credit or not, but I guess it may have done because, when Thatcher sold off the TSB, I moved banks because I did not like Lloyds (who bought TSB). One of teh reasons taht I did not like Lloyds was that they charged for every statement and they charged for withdrawals at cash machines (their own as well as other banks’).

I remember looking around to see which bank I could move to and I ended up at Barclays who offered “free” banking whilst in credit, which in reality meant no charges for statements and no charges to use their own ATM’s (but a fee for using other banks’).

I didn’t stay long with Barclays, for a variety of reasons which are irrelevant to this convo, but I did move to Yorkshire Bank, who at the time (about 1990) were one of many (if not by then all) high street banks to be running massive advertising campaigns to show that they offered truly “FREE” banking, however what Yorkshire were also offering, which at that time was still a novelty, was to pay interest on current account balances.

About 10 years later I moved to Nat West, for the convenience of being able to use on line banking (at that time, 2001, few banks were offering on line banking other than Nat West). By that time I think “FREE” accounts were universal and I remember that Nat West tried to get me to have a “gold” account which was NOT free, but for a monthly fee (£12 I think) I got all kinds of extras …. which were of no use to me whatever, so I refused the Gold account and stuck with a ‘normal’ one.

All that is happening now is that the banks, having git themselves into trouble through greed and dishonesty, are looking for ways to charge us all even more, and to “sweep up” those of us resisting the ‘gold-type’ accounts and not using our overdrafts, who currently do not pay anything obvious and up front for banking. They are, in fact, simply re-inventing the wheel.

At the top of this convo “nfh” asks for a fee for people using cheques.

I’d like to see customers who use Debit Cards, Cheques, ATM’s and any other payment method for which the banks charge a processing fee, charged that processing fee – to the exact penny – and the banks NOT making ANY charge to retailers and service providers for processing the transactions (as they do now). I’d then like to see it made illegal for retailers to charge any fee at all, whether hidden in the markup on goods or upfront like theatres and airlines do, for processing the transaction. That way customers who pay by cash in a shop could see reductions in prices and those who keep insisting that Debit Cards are cheap to process can see for themselves just exactly how much the banks fleece us all for that. (By the way, I do use debit cards and on line banking and also cheques too, but not ATM’s – I don’t even have a PIN so I cannot use an ATM.)

Of course, my suggestion won’t ever happen because it would expose far too many myths and over-charges which already exist and create a huge amount of ill-feeling from the general public.

I don’t know whether Which?’s suggestion regarding fees is a good idea or not to be honest, but I do know that unless someone finds a way to expose all the hidden charges that are levied at present, the banks will go on making a mint at the public’s expense.


As a matter of interest, how much money did you have in your bank account(s)

Dave D says:
23 August 2012

I’m not prepared to ever hint at the amounts and it’s none of your business, however in the light of your other recent comment in which you say that the banks should tell loss making members of the public that their custom is not wanted I will tell you that my accounts are always in credit (in the black to ensure no confusion over the word credit). Therefore I am not a loss making customer as the banks always have some money of mine, regardless of the sum, to invest and make money from. I will also add that although I am vehement in my demand that cheques should remain available, for the benefit of a great many for whom they are the only viable alternative (see other convo’s, not the subject for here), I use on line banking (and you can see that I moved banks once to be an early adopter of that) and electronic payment systems whenever possible. The banks tell us all that these are the cheapest to administer (though as a chartered IT professional I can tell you that if done properly they should NOT be cheap at all!) and so no one can accuse me of being an “expensive” customer.
Since I understand that you, John, once worked in banking it won’t surprise me if you tell us that in fact banks should only take on customers who are permanently in debt and therefore a good source of charges and fees for profit, as RBS openly admitted on a Panorama programme a few years ago was the way that they operated. My view on that is made clear in other posts I’ve added: banks should be making the money which they need to operate from investing deposited funds.

Norm says:
21 August 2012

First time my bank introduces a charge will be the last time I use them. They have already reduced the meagre interest rate on my CA to zero so charging to keep hold of my cash would be the last straw.


I suppose the lesson from all this is that banking is indeed “free” at the point of commission but borrowing [by overdrawing] is penalised.

I can’t support what nfh has said at the beginning about cheque payments. It has been explained in other Which? Conversations how millions of people – not necessarily just older people – cannot make money transfers conveniently, safely and trackably by any other way than by sending a cheque. As Wavechange says, recipients who want to encourage paperless payments should offer preferential terms. I have a feeling even banknotes would not suit those for whom the-only-way-is-electronic.

Dave D’s proposal in the antepenultimate paragraph of his main comment [9:55 am today] is very attractive.

I generally support the line that Which? is taking – it has been well picked-up by the media. When we learnt recently that even the overnight funds [the residues of our bank accounts that are available for inter-bank settlements] have been used to manipulate the market borrowing rates it just added insult to injury. Have they no sense of propriety? Notwithstanding the current recession, banks and other financial institutions still expect to enjoy the fat margins between what they give and what they charge as well as being free to impose punitive excesses on those who need a bit of leeway. The actual cost to a bank of facilitating an overdawing is quite small – not negligible as some people think but manageable in a well-organised bank with a diversity of customers; to profit from it is bordering on usury.


Surely being charged for an unauthorised overdraft is fair enough? Because you’re not supposed to go overdrawn……, Its like getting angry at a library for charging you for not returning books, or getting angry at Didcott’s Pay & Display system for charging you more then the advertised £3.50 an hour when you decide to park your car in the local hospital’s ambulance entrance (I have no idea if Didcott has a Pay & Display parking system or a hospital. I’m just trying to be witty!).

I can understand that the fee’s seem extortionate but surely if the bank is not expecting you to go overdrawn then there will be a cost in finding that money to give you. (Granted probably no where near as much as they charge you, as it seems that the banks are quite good finding money which they don’t actually have!) I agree that these fees are too much, but there are loads of instances where you get charged far more then the cost of an action like when you park to inches onto a double yellow line.

What am I trying to say?

I’m trying to say that nothing in this world is free and why should we be so surprised to see that bank accounts aren’t. I’m not trying to get close to the banks because they do have serious questions to answer, but we do; like it or not, need them. It’s important also to choose our battles, like why don’t banks lend to any business smaller then corporations?

And also don’t they call it free in credit banking?

SueG says:
21 August 2012

I’ve recently received a letter from Santander which says “Over the coming months your business Current Account will be transferred to our award-winning £7.50 fixed monthly fee account, which has been selected based on the amount of cash you currently deposit each month.”

As soon as this happens I shall close the account – they earn money from my cash, but don’t pay me a penny and now have the cheek to charge me.


It would be much fairer if end-prices for banking services were related to cost. Although I’d hate to see some of the recurring fees that are common in other countries (e.g. monthly account fees in Germany or debit card annual fees in France), I do believe it would be fair for UK banks to charge for incidental services that cost the banks money, for example sending out paper statements by post, using another bank’s cash machine (after 1 or 2 free per month) and paper-based transactions (e.g. cheques). Similarly, I’d like to see an end to charges for services that don’t merit additional fees, e.g. non-GBP card transactions (often 3%) and receiving bank tranfers from outside the UK (often £6 or £7).


Ah. Something we can agree on, and something that is appropriate for all users.


Free Banking is just that, it is free. Lloyds offer free banking (Classic Vantage a/c) and give interest of up to 3%. Halifax also give £5 when £1,000 is paid into their Reward account. I use both and get good interest, Internet banking and am perfectly happy. The only proviso is that you must pay £1,000 in each month and that is not unreasonable. I have no criticism. One must take responsibility for one’s actions and if you draw a cheque when there are no funds there and you get charged this is no one’s fault but the person who drew the cheque. If you operate a bank account you must do so intelligently!!


Before un-authorised overdraft fees became the norm the banks would just refuse any debit which took you overdrawn.

I dont see why banks shouldnt be allowed to offer a “packaged deal” which is preferable to a return to the old charge for every transaction or service.

Many other services appear free on the surface but arent – all the free websites are paid for by advertising or commission on purchases.
Most of the TV channels are funded by advertising or grants ( which we pay for ).

Kevin Clarke says:
22 August 2012

So have a look at Abbey “Free Business Banking for Life” they have now told me £7.50 pm yet I signed up for free banking for life!

[This comment has been edited for breaking our commenting guidelines. Thanks, mods.]


Why should charities be backward in accepting cheques? Charities are businesses. They simply are responsible to no one and can and usually are run for the benefit of the staff.

Dave D says:
23 August 2012

You are wrong, but I’m not going into it here: as Patrick pointed out above there are loads of other Which Convo’s far more appropriate to the cheque issue.

Importantly, if you follow the link which Patrick has given you will see (if you bother to read the very lengthy convo) in which ways you are wrong.


John – I help run a charity for the benefit of dogs – the charity status allows us to gain an extra tax refund from donators tax. All the workers at my charity work for free – they are called “volunteers” We are responsible to the Charities Commission – So you are definitely wrong for the charities I work with. It actually costs us to run the charity as outgoings exceed incomings and as the lives of the dogs are at stake we pay the extra to save lives. As most of our donations are from OAPs the cheque to them is the safest and most acceptable method of money transfer.


The banks are desperate to find an excuse to introduce monthly charges for all personal banking customers. Their desperation has reached a new low by blaming customers for the LIBOR scandal (http://rt.com/business/news/banks-libor-account-fee-102/).
It’s foolish and naive to assume that ending “free banking” will save significant amounts of money for people already paying fees for overdrafts, cheques, ATM withdrawals, etc. You might see a small reduction in some of these fees but the introduction of new charges payable by all customers will just mean everyone will be making a significant contribution to the banks profits. Don’t fall in to the trap!


It is worth pointing out that many thousands of British residents are shareholders in banks. Many are invested directly, many more through their pension funds.
Hence if is in everybody interest for banks to be well run and properly financed. There is little point in the constant complaining about banks.
I fear the attitude of Marinuk is counterproductive for everybody, including himself.

Dave D says:
23 August 2012

I’m more inclined to agree with martinuk than with John, but I don’t have all the facts to hand to be certain who is correct.

All I do know is that when my grandparents and great grand parents worked in Williams Deacons bank (as it then was, now RBS) the banks made their money (and a handsome amount of it too) by earning interest on the money which customers had deposited with them. There were no charges as such and transactions which would have resulted in a customer going overdrawn were simply refused (or ‘bounced’). Back in those days banks were quite plush places and the manager of each branch personally looked after the affairs of his customers and made individual decisions about who may be allowed to borrow (loans, mortgages, etc).

The situation seemed largely unchanged in my childhood and teenage years but changed radically in the late 1980’s / early 1990’s.

It is my suspicion that the ‘problem’ (if there really is one) of banks being adequately financed has come about with the advent of it being normal for everyone and every organisation to live permanently on credit. Clearly if the banks are lending out more than they are holding on deposit then they won’t be earning interest on, or investing, the deposits.

I may be seeing this in over-simplistic terms as I don’t have up to date, insider, knowledge of banking.

The other problem which we all face now is that banks have become greedy and immoral (not to say criminal in many cases, as proven many times in the last 5 or 6 years) and seek to make huge profits (John suggested in a post a few days ago that charges should make a profit, I understand that the banking Ombudsman and the Government have several times declared that banks must NOT profit from charges and I agree: charges should be what they claim to be: the COST of delivering the service or dealing with the difficulty for which they are levied, the profit for the bank should come from investing deposited funds).

Whilst ever the banks (and bankers) believe that they have a God-given right to make monstrous levels of profit, by criminal activity if they wish, it will remain impossible to implement charges, in whatever form, which are fair and reasonable.

Regulation, which this government promised but have fought shy of like every government before them (because their billionaire friends are the fat cat bankers and they don’t want to upset them) is the only way to achieve what is required. I won’t hold my breath.


Please explain. Which statement of mine is wrong.
Your email is too vague to have any meaning

Dave D says:
23 August 2012

As explained in my posting – follow Patrick’s link to the relevant convo and read it. Then you will see.


Here’s the Convo John: https://conversation.which.co.uk/money/cheques-saved-by-payments-council/ Please try and be kind Dave!


It is true that banks were different in the sixties or thereabouts. At that time a large proportion of the population did not have bank accounts. The banks decided to attract the non-banked (not to be confused with the non dead) .
In other countreis, such as Germany, local banks,(Sparkassen in Germany) accounted for this sector of the market.
The building societies could have serviced this market but did not seriously try. There directors were too busy drinking beer and playing golf.
By trying to service the general population, the banks entered an area which was barely profitable and never stops moaning.
That is where we are today. What has happened is the customers, not the banks, have got greedy and immoral. Which feeds this monster.
The suggestion that banks should do something for nothing is absurd. They tried that in the Soviet Union. Their banks collapsed.



You want to charge customers for some services but not for using ATMs because customers would not use the account. Now you say that it is absurd that banks should do something for nothing. I’m not sure about the logic. 🙂

Bob Bill says:
4 September 2012

John – are you in a parallel universe from the rest or us if the customers are greedy and immoral?.

The banks are shining examples of decent, ethical, and honest business practice I suppose reading your comments.

How are Fred Goodwin and Bob Diamond these days, take it they are with you wherever you are?


To me it is simple – When I joined First Direst – I was told that provided my current account was in reasonable credit – there would be no bank charges as the costs to maintain my on-line account were met from the profit made on my deposit. So I did not have any extra charges. I have NEVER been charged for any bank transaction – so it is FREE – Not a Myth – I don’t pay anything extra. since I joined many years ago. I left Midland Bank because they would add “sundries” of £7.50 every so often – when I inquired exactly what it was – they refused to tell me but always refunded the amount – I left because I no longer trusted them.

For Banks to insist that they must charge customers a standard charge is ridiculous unless the interest paid for all deposits is a great deal more than they are today – Virtually all savings accounts are losing the depositors money. So it is time to remove my savings abroad for better returns. The Banks should be split up NOW not continue to just discuss it – It has been a disaster for years.

Now if First Direct decided to start to charge me for my account – I would leave immediately – As I will not subsidise other people’s poor management of their money – which a universal charge WILL do. I will not pay for packaged “deals” as I don’t want the extras and refuse to pay for items I don’t want or use.


I don’t pay bank charges either but my but the fact that I maintain a healthy credit balance to avoid the danger of an overdraft means that I am losing out on interest that I could achieve elsewhere. It might not be a charge but I see it as the cost of having a current account. Just like there is a cost of keeping cash under the mattress or in a piggy bank.


Wave change – So change your bank.


I don’t expect something for nothing, Richard, a point you have made below.

I have only spotted two mistakes that they have not automatically corrected in 44 years. That is not bad service and having read many tales of woe, I’m reluctant to change. Apathy yes, but at least it is reasoned apathy.


Interesting an IT professional says computer systems are not cheap. Strange then we should have so many computers.
Of course set up costs for computers are high, running costs near zero.
We live in a capitalist economy. People provide goods and services at a price they think the customer will pay and the provider will makee a profit (lest call it a surplus-same thing less emotional).
Customers take that product or service if they feel the price demanded is worthwhile for them.
Everybody has freedom to choose.
THese are the rules of banking,
Other system have been tried, communisn, socialism etc They have led to gross inequality and low standards of liiving drev. The best system has always been shown to be capitalism.
It has its faults but they are minor compared with the alternative.
For thosewho do not like capitalism the options are shrinking. Maybe live in Cuba, mayber Burma. But you will find banks far worse or non existan fin those countries.
So here is my meaasge for one and all. STOP MOANING


Why are you trying to impose your ideas on us, John?

You have demonstrated that you do not appreciate the importance of cheques to charities. Your suggestion of charges for using cheques would damage the work of those who do a lot to help people enjoy their lives and do some more serious work as well. Which? has helped us to save the cheque for the time being.

You said that charities are run for the benefit of the staff. A Registered Charity is responsible to the Charities Commission and its trustees have to ensure that it follows its aims, as outlined in its constitution, behaves responsibly with money, and provides annual financial reports to the CC. Try doing some charity work and I think it will help you see things from the perspective of others. If you cannot spare some time, perhaps your company could make some donations.

Many of us are quite happy and I’m not sure if it us who are moaning. 🙂


Wavechange –
Surely YOU are trying to impose YOUR ideas on us CONSTANTLY.

In fact I often completely disagree with YOU. John has as much right to express his opinion as you have to express yours. This is not a forum for a particular viewpoint.- yours


Indeed. Apologies to both and I will leave the discussion.

SaraJayne says:
24 August 2012

Of course banking isn’t free. Seems the banks sure have fooled a lot of people into believing it is, though.

One thing that truly irritates me is the habit they have of holding up transactions for days on end, just to eke out whatever interest they can on it. When I worked in a money-handling job, I saw this most clearly: when we charged a customer’s card (credit, debit, it doesn’t matter), the money left their account – or at least got locked – immediately. The business I was working for wouldn’t get it for days or weeks. If we needed to refund the customer, the money would leave our accounts immediately, but not get to the customer’s account for several days. Since most people don’t seem understand that it’s the banks standing in the way, being greedy, the customers would get upset at the business – or me.

I’d rather pay an upfront fee for my current account than to have this delay the banks have created just because it works for them. I’ve been on both sides of the counter mentioned above, and when the sums being refunded are hundreds of pounds or dollars, the likelihood is high that it will cause the customer hardship to not have the money immediately.

I do, in fact, pay a monthly fee to my US bank account when the balance goes below $200 a month. It’s an absolutely stellar bank, that always has my back when things go wrong, and the fee is avoidable, so I don’t mind this arrangement. Here in the UK, however, we don’t have proper competition in banking: we have a bank cartel that doesn’t actually care about customer service. Which? is right to be concerned about the banks colluding about a new fee – with only a small handful of banks, it’s quite easy for them to decide to all institute something and then get away with it because of the lack of competition. I really wish we had the thousands of banks to choose from that I’m used to.

All the discussion of bringing in fees for all these various methods of using the bank – charging for ATMs, cheques, teller services, etc – is quite silly until we (as someone suggested above) really reveal the massive profit the banks are already making from what they do charge outright, plus the profit they make from delaying all our payments in an age where there is no delay in moving money.

Oh, and Which? – I fully support your campaign for transferrable bank account numbers. Why don’t you push for using IBANs instead of the introduction of some other number? The IBANs and the infrastructure for dealing with them are already there.

Brian Saunders says:
24 August 2012

I’ve had a Bank account for over 50 years. An account was opened for me and charges, which then existed, were initially paid for me by my employers, the then, Esso Petroleum Co.Ltd.
At that time ordinary working folk didn’t have bank accounts. All pay and ones purchases were always a cash transaction.
Look at today, I always do all my banking transactions on-line. If I want cash, I have a debit card to take money out of my account at any of thousands of the existing cash points that are around. No need for me to keep any large unused amounts of cash in my current account that’s not earning interest, I can just log on to my account and move any surplus cash into an interest bearing account. The beauty is that all this costs me nothing at all. Of course, I never dip in to any overdraft facility. If I did, I would expect to pay for the privilege.
Yes, I am very happy with the service I get. Like everyone else I’ve had my problems with Banks but I have been able to sort these out and I for one would be happy to pay a fair price for their services especially if this meant that Banks would be able to contain themselves from some of their casino like activities and no longer felt the need to pay excessive bonuses to some of their highly paid staff.

Peter says:
24 August 2012

Banking is not and has not ever been free nor do we have any right to expect it to be. Its paid for by the banks customers, either directly in charges in indirectly in the bank using deposits to generate profit. ( I’m ignoring speculative investment banking which should be separate)
The only debate is what is the charging model and what’s it reasonable to charge. Given that banks are commercial organisations in a capitalist system its difficult to dictate to them. The Which strategy of playing the capitalist game of changing banks if you don’t like them has so far , in my view, failed as the banks are better at it than us! I would like
A choice of how a pay for my account, ie directly, indirectly or a combination of the two
A proper definition of what services I get for whatever account type I have signed up for.
A current account should have a small (£100?) buffer for over drawing but nothing else.
We need to kill off exponentially escalating overdraft charges; I suggest apart from above buffer there are no overdrafts as of today, they should be replaced by proper agreed loans or credit facilities. They can be set up in advance or when accounts would go red this should trigger the bank to contact the account holder and agree an arrangement. At this time proper fully transparent conditions should be specified and agreed. Loan defaults etc should be covered by the loan accounts and not by money from the bank accounts.

Incidentally The above is what I’ve pretty well got as I am able to keep away from overdratfs and have a packaged account which gives me a good balance of value for money and convenience.

I don’t think the Which article on this is helpful as it is I think, over emotive in talking about potential loss of “free” banking and does nothing to produce a logical debate. I do like to the life time account number though and agree IBANs would seem to be a good starting point


A sensible comment. Customers should have the ability to change banks. They can but it is not easy and requires some persistence.
Never change a bank. Merely start a new account with another bank. I have tried twice so take my advice.
The reason it is so difficult is the barriers erected by the Government. So called money laundering and regulation.
Regulations never, repeat never, works.
Money laundering assumes everybody is a criminal until proven innocent.
Two reasons, among many, where the Government is our enemy

Michael A Richardson says:
25 August 2012

Free Banking is clearly NOT a myth. I have recently studied literature/brochures from some different banks, and ALL clearly state their charges and fees. It is surely a case of many consumers simply not reading the information given, because of pure apathy or laziness. A consumer should surely EXPECT to be charges if they go overdrawn without permission, as they are expecting a cheque to be paid when there are insufficient funds. WHY SHOULD IT BE FREE ??? The levels of charge are bound to be different – if they were the same, the banks would be accused of collusion. Those being charged £900 per year have the option of moving accounts – IF a new bank is willing to accept someone who obviously cannot manage their money. The Banks have made very many mistakes but “Bank BASHING” will not cure the financial crisis, nor will the many thousands of people who have joined the band wagon to reclaim PPI stating in many cases that they were misold the product and in a huge number of cases when they have never had the product – is that not fraud ? I accept that many were misold PPI but the vast majority, wanter the comfort of the cover, but now the loan is repaid, claim that they did not need it – rather dishonest is it not..Peter Vicary=Smith, the chief executive of Which, should not need to make explosive comments about the myth of free banking, it is there for millions of people who conduct the account properly and have READ the terms and conditions of the account.


Completely and utterly agree – First Direct have been completely up front in how they offer a free to use banking system provided you do not become overdrawn.

Far too many – encouraged by Which? – want something for nothing


Hi Michael, we’re arguing that calling banking ‘free’ is a myth, not necessarily that it should be completely free. Though banks like First Direct, which is our top recommended bank, might be very good at explaining charges to customers, others are not as transparent and the charges are often excessive (as shown in the examples we used). There’s also lost interest from poor 0.1% interest rates.

As much as we agree that you should your T&Cs, we have written many Conversations about how unclear T&Cs can be. In fact, our latest campaign, Fixed Means Fixed, is about mobile price rises being unexpectedly imposed on customers. There is a term that allows this in mobile companies’ contracts, but it’s hidden in the small print and isn’t something the reasonable person would expect: https://conversation.which.co.uk/technology/fixed-means-fixed-campaign-mobile-phone-price-rises-ofcom/

We want the new regulator, the FCA, to have the power to clamp down on overdraft charges that are too high, too complex and too difficult to compare. We also want it to be easier to compare and change bank accounts. We’re raising these issues with the FCA, the Treasury, the OFT and the Parliamentary inquiry into banking.

Our PPI checklist also helps people with when they can legitimately claim missold PPI: http://www.which.co.uk/campaigns/personal-finance/the-ppi-campaign/mis-sold-ppi/


Which is a consumer magazine. It writes articles to appeal to consumers. Ego Business bad, consumers good.
That is obvious nonsense. The truth is the opposite. Without business nothing would get done. It is the profit motive that drives forward our living standard.
When which started it was pioneering in that it gave a voice to consumers in what was then a tightly controlled socialist economy.
Now we have had Thatcher and globalisation. Which is an old fashioned magazine trying to appeal to the type of audience inhabited by Daily mail, and Sun readers. I cancelled my subscription more than twenty years ago.


If you had not cancelled your Which? subscription you might more in touch about what Which? is doing, John. 🙂


Nope Wavechange – I still pay my subscriptions but agree with John – Which? is not serving it’s subscribers as well as it should. I’m considering un-subscribing too..


I suggest that we get back to the subject rather than discussing the merits or otherwise of Which?


Why? This topic received a lot of negative comments and reactions in other forums about the role of Which? the consumer magazine – surely we should debate about the merits of Which? after all we pay for it.


I realise that I risk getting shot down in flames here, but am I not right in saying that Which? CONVERSATION is open to anyone, not just Which? subscribers and if I am correct then, quite apart from being off-topic, this isn’t the place to discuss the Which? Members’ only magazine, reports and subscriptions.

I don’t always agree with Which? either, but I don’t think we will get them to make any changes we’d like to see by debating it on a convo dedicated to something else.


Hello John, we haven’t said that banking should be free – we’ve said that the concept of ‘free banking’ is a myth due to the often excessive fees and missed interest. We don’t think it would be appropriate to charge more for current accounts when such fees are often unfair and not transparent – we also think it is completely unfounded that charging more would stop mis-selling or clean up banking. We understand that you can’t get everything for free, but that’s our point – banking isn’t free, and charging more won’t fix the broken banking system.

We are working to make sure consumers voices are heard and campaigning on your behalf so that we can have a financial regulator that is not afraid to stand up for consumers and challenge the banks: http://www.which.co.uk/campaigns/personal-finance/watchdog-not-lapdog/

The OFT announced that it will be reviewing the personal current account market, and we want the investigation to lead to the increase transparency of bank account charges to allow people to better manage their accounts. We’re also calling on the new Parliamentary inquiry into banking to make sure banks start delivering for customers.


With all the calls for more transparency in banking and demands that, in retail banking, fees and charges are related to actual costs involved .
It is not surprising then that banks are looking at charging structures.based on a realistic cost per transaction or a monthly fee which are easier to defend as transparent and more related to actual costs involved.
I suspect most people do not want this and are happier with the non-transparent method of not being paid realistic interest on current accounts which covers the cost of the service ( averaged over all customers).
Other services such as mobile phones and broadband provision operate an offset and averaging charging systems ; I doubt anyone actually gets charged on an individual basis for the actual cost of their broadband usage.


Why does the headline refer to the ‘myth’ of free banking? My current account is free (i.e. I am not charged for having it, or for making transactions) as long as I remain in credit – which I always do. OK, I don’t get any interest on the credit balance, but whenever the balance builds up I make an online transfer to a savings account (I can always transfer it back to the current account if I need to). I would not be at all happy if my bank reintroduced fees (many years ago I believe it was normal to be charged for transactions). I would feel that I was subsidising people who go overdrawn or were breaking the rules. Why shouldn’t those people pay for the privilege?

Peter Hutcison says:
26 August 2012

Registered Charities are overseen by the Charities Commission. One I know has been shut down by the Commission for financial irregularities. Its main funder had also cut off its finance. Some of the senior staff will be prosecuted.

Most of the Charities I know about have no paid staff. Everything is done by volunteers. The one Charity I know that has paid staff has rates of pay that are less than my pension and unbelievable job insecurity. That Charity relies heavily on volunteers too.


We started on bank charges, now we are talking about charities, of which I know a great deal.
Charities are business, or at least they have to be run as business. Therefore is no reason why they cannot use electronic banking just like everybody else.
As an aside I have worked as a volunteer on several charities and have studied them closely. Many, although not all, exist to give their staff a good living. Many of the salaries would make a banker blush. I can give names if you want.
I have met many officials from the Charity Commission. They said to me they simply do not have staff to regulate the charity sector and in any case regulation is not their job. There is plenty of statutory and case law regulating charities.
The word charity has a good public image. But the fact is a charity is responsible to no one, at least in practice, although not in law. But the law is too cumbersome a weapon. A company at least has shareholders keeping an eye on what is happening.
So stand by for a raft of scandals involving the Charity sector.


I’m not sure here is the best place to criticise charities.

The charity I do most work for is NOT a business. It is a small charity run entirely by unpaid volunteers. Most of our reserves are in a CAF account and we have a current account based at branch close to where our treasurer lives. Like our treasurer, I use electronic banking wherever possible.

Much of the money we collect is in cash. I collected £145.69 in cash this afternoon. I paid this in to our charity’s current account when I got home and will use the cash myself or make a trip to my local bank. Quite frequently I am presented with a cheque, often in the countryside. I would be inappropriate for me to ask anyone to make a payment in advance and inadvisable to expect that they would pay later. Many of our kind donors are elderly and do not have a computer.

I am a trustee of our charity and am very happy that it is run in a businesslike fashion. I am happy to take cheques and so is our treasurer. We have at least 20 members collecting funds for our charity and most of the donations are either cash or cheques. We do encourage all members to pay their membership by standing order, though many choose to pay by cheque or in cash. Our county council recently awarded us a cheque for £1500 and the town council gave us a cheque for £100. I’m not sure how you would handle this, John, but I have friends in a local wildlife trust and a hospice that use electronic banking but also handle a considerable number of cheques.


Hi, if you’d like to talk about charities please have a look at some of the Conversations we’ve started on the topic: https://conversation.which.co.uk/tag/charity/

One of our key rules on Which? Conversation is to stay on topic: ‘Please keep comments relevant to the topic at hand – remember this isn’t a forum. Veering off to add colour to your point is fine, but off-topic posts may be removed to keep the Conversation on course.’ https://conversation.which.co.uk/commenting-guidelines/

Hopefully we won’t need to remove any comments! Thanks.


I had already looked and could not find a relevant Conversation to discuss the financial issues relating to operating charities, Patrick. Perhaps we might be better on one of the ones about cheques and hope that does not go too far off-topic.

Whatever happens with personal banking and charities could well be similar. Any surcharges for using cheques would be likely to apply to both.


I have not and never would say you should not use cheques. However, I do think you should pay for their use.
That is only fair on other uses of bank accounts.


And in the same way, John, as Wavechange and I and some others have said a while ago, users of ATM’s, Debit Cards and on-line transactions should also be charged for their use, particularly the Debit Cards which have considerable “hidden” costs, as I outlined in details a while ago.

I don’t think many people on here are disagreeing with the fundamental point that all types of transaction attract some sort of cost; what the convo is about and what people are disagreeing on in the best way to collect that cost or charge and the best way to make it understood (‘transaparent’) to the general public.

As far as I can see everything (on topic) that has been said on this convo so far boils down to the necessity for us to choose one of three models:

a) Charges per transaction, like we used to have until the early to mid 1980’s, which reflect the actual cost of processing each transaction. This will be unpopular with most of not all people because it will reveal the true cost of every transaction and in many cases this will be an unwelcome surprise for the customers.

b) “Bundled charges”, such as mentioned by Which? at the outset. Some people (who already have accounts with some sort of ‘membership fee’) will be used to these and will probably think this is the best option. Many people, like me for example, who avoid all charges at present by the way we conduct our accounts, will dislike this idea because it feels like we are being charged for the sake of it. In reality, **if done properly and transparently**, we’d probably be paying a fair if not discounted rate for the services we use. It’s the bit inside the ** above that’s the issue: I’m not at all sure we can trust any of the banks to do it properly and transparently.

c) The status quo. This is anything but transparent and it’s not particularly fair for a plethora of reasons. However, as most people are used to it and many never knew how things used to be before it is, on the surface, the most attractive option for a great many of the public. It’s probably not a choice we’ll have for too much longer though, as Banks are desperate to make more profit and Government and organisations like Which? are keen to encourage the banks to make things clearer to customers.

Bob Bill says:
4 September 2012

Or Shareholders?

Chris says:
27 August 2012

As many say, nothing in life is free. Banking is a service and consequently will cost. My compliant is that banks are not upfront with their costs, rather they keep then hidden. Is it because in reality the costs are too much, or do they have trouble with honesty?

rogerroger says:
29 August 2012

I have remained with the same bank for many years as I have never had cause to wish to change it. I have never paid any charges; I would be very unhappy if they required me to pay a fee and I would look elsewhere. I have an income paid in each month but I leave sufficient funds in the current account so I do not have to worry about going overdrawn accidentally. I accept that it is not “free” as the bank uses the interest in effect to pay for the account, but as interest rates elsewhere are very low, the convenience of always having funds available is worth the theoretical loss. I agree that, were the banks to charge a monthly fee, other charges would not be significantly reduced, so only the banks would win.
I sometimes use cheques as there are situations when they are the only sensible method of payment, so I do not see why they should be phased out as that only benefits the banks.

Bob Bill says:
3 September 2012

Here’s HSBC’s idea of free banking:

1 – You post them a cheque to pay your credit card
2 – They loose the cheque for 2 weeks (until after the due date) and advise you to cancel it
3 – £12.50 if they do it, £10 if you do it online – ie you press a few buttons on your computer rather than them doing it
4 – You complain about the charges due to their error, plus they took the opportunity when ringing one of the expensive phonelines at my own expense, to try and sell me a loan
5 – They promise you refund, then refund 60% of what was promised
6 – The missing cheque appears mysteriously on your CC statement the next day
7 – Then they ignore your cancellation until you really kick off at them – mine was stopped after I played steam again, 11.30 at night, 31 mins before the cancelled cheque would have cleared my account
8 – No apology, and 24 hours later no reply or compensation, although they did finally stop the cheque, they did not confirm this

Banks and politicians are the lowest of the low, for the mess they created for all of us who don’t live on outrageous wages, or tax payer financed bonuses and expense accounts. Plus the arrogance and criminal acts of the LIBOR and PPI scandals.


Bob Bill
You could have amde this payment in seconds if you had used electroci banking.
I am with HSBC. They should not have to put up with people lie you. As a shareholoder of HSBC I invite you to move to another bank

[Hello John, we have had to edit your comment for breaking our our commenting guidelines. Thanks, mods.]

Bob Bill says:
4 September 2012

John, invite all your disgruntled customers to find another bank, it’s your dividends that are going to take a knock not mine


Hi both, can I just remind you of our commenting guidelines https://conversation.which.co.uk/commenting-guidelines – it’s fine to disagree with one another, but don’t make it personal. Thanks.


Current accounts might not pay interest but we can do more or less what we want if we stay in credit.

I am amazed how many people use cash dispensers to withdraw a single note of the lowest denomination available. That must make for a lot of transactions on their account, but I suppose it means that they are minimising the cash they carry around.

Natwest, which I bank with, suggest that I pay in several cheques using a single paying in slip. I explain that doing a separate slip for each cheque helps me to check my statement. The charity I work for banks with HSBC, and they have accepted many cheques without a single comment.